[SHANGHAI] China's government is authorising developer debt sales for the first time in five years in a bid to avoid bankruptcies as the property market cools.

Jiangsu Future Land Co, a builder of homes in eastern China, sold two billion yuan (S$401.3 million) of five-year AA rated bonds last week to yield 8.9 per cent. That's less than the average 9.73 per cent on trust products that many developers relied on for financing after authorities stopped approving onshore note issuance in 2009.

The China Securities Regulatory Commission reversed course in April when it granted four real estate companies the right to sell the securities, after the collapse of a builder south of Shanghai the previous month underscored financing strains. The government allowed the first mortgage-backed debt sale since 2007 last week, in the latest step to ease restrictions on the industry as new home prices drop in a record number of cities.